why are pensions reccomended

moneysaver21

jem16 wrote: »

Ah right - I'm with you now but you're not quite there.

If you made a £40k contribution to your SIPP you would have £10k added to it by the pension provider. So that would be a gross £50k contribution. As a 45% taxpayer you would be entitled to claim another 25% from HMRC so £12,500. This, however, never reaches your pension as it's done as a rebate or by paying less tax.

To get 45% on all of your contribution this tax year you would need to be earning around £200k.

Fortunately I am

And yes, you are right, but just a different way of writing it

agarnett

[SIZE=-1]

gadgetmind wrote: »

agarnett wrote:

if you believe those on above average earnings are the most valuable and productive members of society

.Yes, how dare they demand more money just because they paid attention at school, acquired valuable skills (rather than huge chips on their shoulders), and are actually prepared to apply themselves to create the kind of products that make Britain great. Perhaps, they should have just drifted through life, not bothered with education, and then got a dead end job and/or rely on government handouts?

Sorry, but hard work and smarts are rewarded. You may not like this, but it's the way the world works.

[/SIZE]Erm I wrote that over three weeks ago in response to a particular comment generalising the effect of reversing the pattern of pension contribution tax breaks on "people". What I actually said was:[SIZE=-1]

bowlhead99 wrote:

Your scheme to reverse the tax breaks for contributing to retirement just increases people's marginal tax rates and thus reduces the incentive to work and be productive. If you can't defer it efficiently and don't really need it now, why even try to earn it?

Depends on who you mean by "people" - if you believe those on above average earnings are the most valuable and productive members of society then you may not like my idea much. You'd also be somewhat naive I think.

[/SIZE]... and chips did you say again? I rather think I paid more attention at school than most, gadgetmind, and I for one simply don't believe that the late great British educational sausage machine was designed solely to spew out minds to create flash-in pan taxpayer funded products like BBC computers, then to faff around a bit before finding feet again, and then for those feet to ultimately end up on desks for as long as possible collecting royalties on phone chips whilst making phone calls to retained lawyers fending of all threats to copying intellectual property.

If that's what you think makes Britain great I have to tell you that yes it's interesting but that it reminds me more of Kings of Castles type playground antics at break-time, as opposed to what was taught in class!

But I grant you it'll take all types to make Britain great again, even those that habitually come with chips, et à chacun son goût!

jem16

moneysaver21 wrote: »

Fortunately I am

And yes, you are right, but just a different way of writing it

So if you made a net £40k contribution you received £22,500 tax relief and not £30k as stated?

If you had wanted to make a £75k gross contribution to get £33750 tax relief, you should have contributed £60k and not £40k to the SIPP.

gadgetmind

agarnett wrote: »

... and chips did you say again?

If you like, amongst many thousands other things that hard working people can create, even those like me who came through the "sausage machine" in Lancashire mining villages (where the mine had shut!)

But you clearly don't like innovative export-driven businesses, and I'm sure you'd therefore like them to up sticks and move overseas. The policies you seem to favour would definitely deliver on this, so it's fortunate that you don't seem to be in a position to impose them on anyone.

moneysaver21

jem16 wrote: »

So if you made a net £40k contribution you received £22,500 tax relief and not £30k as stated?

If you had wanted to make a £75k gross contribution to get £33750 tax relief, you should have contributed £60k and not £40k to the SIPP.

I contributed £70k

jem16

moneysaver21 wrote: »

I contributed £70k

Then why say?

moneysaver21 wrote: »

I opened a SIPP and put in £40k.

No wonder we're confused. :rotfl: